Home prices in various metropolitan areas for the 2nd quarter -- there are still some double digit growth markets, but if you look at the overall, growth is small or non-existent (the midwest is pricing at 2% lower since last year).


What does this mean, especially coming from me? My record has been pretty clear. Since joining this forum I have been very bearish on residential real estate investments, and I remain that way. However, in looking at some of the top growth markets, I am coming to the belief that there are some markets that are bound to go up. It is just a matter of finding them. Prices are relatively low and may have some time to go before they max out. However, for every area there is a ceiling. When prices hit, they tend to drop quickly. I would also question what inventories are like, and if they indicate that while some houses are selling for greater amounts, others aren't selling at all.

The caution that I would raise here is that house prices need to be in line with salaries. The investor who plans to purchase a house and flip it needs to see what the average salary is before figuring out what the price point for the house will be.